Starting An Affiliate Program
So, you have heard good things about affiliate programs (also known as associate programs), those programs that reward other Web sites for sending you customers, and you want to set one up for your site to help drive traffic and increase sales. Here are some important issues to keep in mind.
Pricing of Commission/Bounty
Commission rates vary greatly. Some programs pay cash. Others pay in store credits. Some pay on gross sales, others on net. Some pay per "lead" or "application." Some pay a flat amount, others a percentage. Some use a sliding scale or a hybrid.
Here is a sampling of what some current programs pay:
| Amazon.com | 5% to 15% |
| Barnes & Noble | 7% on books |
| Bacchus Cellars | $0.01 to $0.50 (U.S.) per link |
| CyberChefs | $0.25 per reg. |
This is still a wide-open arena, so you can be creative as you structure your program. What kind of an affiliate program makes sense for your business?
Creating Formal Agreements
You'll want to create a formal agreement for your program. Things to consider as you draw up your agreement:
- How often to pay
- Minimum payments
- Excluded sites (sex-oriented, illegal, etc.)
- How amounts are calculated
- Returns and credits
- Term and termination
- Governing law
- Requirements to join
- Exclusivity requirements
Check out these agreements for more ideas:
Setting up Your Program
Setting up an affiliate program can take many forms. You can:
- develop your own software
- use cookies
- use affiliate codes
- set up individual pages for each affiliate
- use a packaged software solution
- use a service bureau
- use your shopping cart software
- use a combination of the solutions above
This article, from Associate Programs, goes into more detail on many of the options listed above. No matter how you decide to administer your program, you will want to have a mechanism in place for tracking participation and rewarding those who send you new business.
Tracking Commissions
One area in which you are sure to get lots of feedback from your affiliates is your commission reporting. They prefer an accurate, real-time page with good history reporting capabilities. Few programs currently provide good reporting systems, so you will stand out if you can devise a good reporting procedure.
Check out amazon.com's sample tracking report. Certainly not a visual masterpiece!
WorkZ.com Bottom Line
Affiliate programs have done very well for many sites. Like everything in life, how much you put into your effort will probably dictate the outcome.
We recommend that you visit some sites and see what feels good to you in terms of format, structure, and business model. Use the best ideas within the resource budget you have.
A well-thought-out program could add hundreds of sales to your site every month.
About the Author:
The WorkZ staff is made up of gurus in many areas of expertise including Sales, Marketing, all aspects of the Internet, Technology, even starting and running businesses.
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